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SunOpta Announces Third Quarter 2011 Results

November 08,2011

TORONTO, Nov. 8, 2011 (GLOBE NEWSWIRE) -- SunOpta Inc. ("SunOpta" or "the Company") (Nasdaq:STKL) (TSX:SOY), a leading global company focused on natural, organic and specialty foods and natural health products, today announced financial results for the quarter and three quarters ended October 1, 2011. All amounts are expressed in U.S. dollars and results are reported in accordance with U.S. GAAP, except where specifically noted.

For the quarter ended October 1, 2011, the Company realized quarterly revenues of $272.4 million versus revenues of $217.5 million for the quarter ended October 2, 2010, a year over year increase of 25.3%. This increase reflects continued growth in the natural and organic foods sectors. Revenues increased 14.6% excluding the impact of the acquisitions completed during 2010 and 2011.

For the quarter ended October 1, 2011 the Company realized earnings per diluted common share from continuing operations of $0.06 or $3.7 million, as compared to $0.00 or a loss of $0.2 million for the quarter ended October 2, 2010. These results were driven by continued strong performance in the International Foods Group offset by reduced earnings in the Grains and Foods Group due to commodity market pressures in the sunflower segment, reduced earnings in the Ingredients Group due in part to the loss of a major customer earlier in the year, and reduced earnings at Opta Minerals due primarily to the impact of foreign exchange losses realized in 2011 versus significant gains in the third quarter of 2010.

The quarterly results include additional pre-tax costs of approximately $2.1 million related primarily to rationalization and legal matters, acquisition and start-up costs, plus foreign exchange losses as a result of significant currency fluctuations during the quarter.

For the quarter ended October 1, 2011, the Company realized EBITDA1 of $12.5 million as compared to $14.7 million for the quarter ended October 2, 2010.

For the three quarters ended October 1, 2011, the Company has realized revenues of $823.6 million versus revenues of $667.7 million for the three quarters ended October 2, 2010, a year over year increase of 23.3%. Revenues increased 12.5% excluding the impact of the acquisitions completed late in 2010 and in the third quarter of 2011.

For the three quarters ended October 1, 2011, the Company has realized earnings per diluted common share from continuing operations of $0.21 or $13.8 million, as compared to $0.16 or $10.6 million for the three quarters ended October 2, 2010. For the three quarters ended October 1, 2011 the Company realized EBITDA1 of $42.5 million as compared to $45.5 million for the three quarters ended October 2, 2010.

At October 1, 2011, the Company's balance sheet reflects a current ratio of 1.49 to 1.00, long-term debt to equity ratio of 0.18 to 1.00 and total debt to equity ratio of 0.53 to 1.00. For the quarter ended October 1, 2011, the Company generated cash from continuing operating activities of $11.7 million as compared to $20.3 million for the quarter ended October 2, 2010. At the end of the quarter, the Company has total debt outstanding of $161.7 million, a decrease of $6.1 million from the period ended July 2, 2011. At October 1, 2011, the Company has total assets of $624.3 million and a net book value of $4.65 per outstanding share. At quarter-end, the Company was in compliance with all its debt covenants.

Steve Bromley, President and Chief Executive Officer of SunOpta, commented, "Results for the third quarter reflect continued growth in the core natural and organic foods categories within which we operate. Our results also reflect the impact of the difficult commodity environment over the course of this year, especially in the sunflower component of our business. We continue to be very confident in our strategy and are encouraged by the number of new initiatives and opportunities in the pipeline. We are focused on expanding our business in fast growing healthy foods categories while at the same time improving operating margins and returns on assets employed. We believe we are well positioned in the natural and organic foods sector and are confident in our future prospects."

The Company plans to host a conference call at 10:00 A.M. Eastern Time on Wednesday November 9th, 2011 to discuss the third quarter results and recent corporate developments. The conference call can be accessedvia a link at the Company's website at www.sunopta.com. Additionally, the call may be accessed with the toll free dial-in number 1-877-312-9198 or international 631-291-4622. A replay of the call can also be accessed between November 9th and 16th with the toll free dial-in number 1-855-859-2056 or 404-537-3406 followed by pass code: 17828140#.

1See discussion of non-GAAP measures

About SunOpta Inc.

SunOpta Inc. is a leading global company focused on natural, organic and specialty foods. The Company specializes in sourcing, processing and packaging of natural and organic food products, integrated from seed through packaged products; with a focus on strategically significant vertically integrated business models. The Company's core natural and organic food operations focus on value-added grains, fiber and fruit based product offerings, supported by a global infrastructure. The Company has two non-core holdings, a 66.4% ownership position in Opta Minerals Inc. (TSX:OPM), a producer, distributor, and recycler of environmentally friendly industrial materials, and a minority ownership position in Mascoma Corporation, an innovative biofuels company.

The SunOpta Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3958

Forward-Looking Statements

Certain statements included in this press release may be considered "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, which are based on information available to us on the date of this release. These forward-looking statements include, but are not limited to, our focus on growing our business and improving operating margins and returns on assets employed and our positioning in the natural and organic foods sector. The terms and phrases "continue", "improving", "focused", "believe", "positioned" and "confident", and other similar terms and phrases are intended to identify these forward looking statements. Forward looking statements are based on information available to us on the date of this release and are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors the Company believes are appropriate in the circumstances including, but not limited to, general economic conditions, consumer interest in health and wellness, product pricing levels, current customer demand, planned facility and operational expansions, competitive intensity, cost rationalization and product development initiatives. Whether actual timing and results will agree with expectations and predications of the Company is subject to many risks and uncertainties including, but not limited to, global economic conditions, consumer spending patterns and changes in market trends, decreases in customer demand, potential failure of product development, working capital management, inability or delays in implementing continuous improvement initiatives, availability and pricing of raw materials and supplies, and other risks described from time to time under "Risk Factors" in the Company's Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q (available at www.sec.gov). Consequently all forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized.

 

SunOpta Inc.      
Consolidated Statements of Operations       
For the quarter ended October 1, 2011 and October 2, 2010      
Unaudited      
(Expressed in thousands of U.S. dollars, except per share amounts)    
       
 Quarter ended Quarter ended  
 October 1, 2011 October 2, 2010 Change
 $ $ %
       
Revenues 272,420   217,487  25.3%
      
Cost of goods sold 239,478   184,723  29.6%
      
Gross profit  32,942   32,764  0.5%
      
Selling, general and administrative expenses 22,981   21,118  8.8%
Intangible asset amortization 1,413   1,155  22.3%
Other expense, net  321   7,453  -95.7%
Goodwill impairment  --   1,654  -100.0%
Foreign exchange loss (gain) 934  (58) 1,710.3%
      
Earnings from continuing operations before the following 7,293  1,442  405.8%
      
Interest expense, net 2,033   2,036  -0.1%
      
Earnings (loss) from continuing operations before income
taxes
5,260  (594) 985.5%
      
Provision for (recovery of) income taxes1,438  (1,053) 236.6%
      
Earnings from continuing operations3,822  459  732.7%
      
Discontinued operations      
Loss from discontinued operations, net of taxes(383) (15,616) 97.5%
Gain on sale of discontinued operations, net of taxes 71   49,867  -99.9%
      
(Loss) earnings from discontinued operations, net of taxes(312) 34,251  -100.9%
      
Earnings3,510  34,710  -89.9%
      
Earnings attributable to non-controlling interests144  643  -77.6%
      
Earnings attributable to SunOpta Inc.3,366  34,067  -90.1%
      
Earnings (loss) per share - basic      
 -from continuing operations0.06   --   
 -from discontinued operations(0.01) 0.53   
  0.05  0.53   
       
Earnings (loss) per share - diluted       
 -from continuing operations0.06   --   
 -from discontinued operations(0.01) 0.52   
  0.05  0.52   
       
       
       
SunOpta Inc.      
Consolidated Statements of Operations       
For the three quarters ended October 1, 2011 and October 2, 2010    
Unaudited      
(Expressed in thousands of U.S. dollars, except per share amounts)    
       
 Three quarters ended Three quarters ended  
 October 1, 2011 October 2, 2010 Change
 $ $ %
       
Revenues 823,562   667,727  23.3%
      
Cost of goods sold  721,324   561,932  28.4%
      
Gross profit 102,238   105,795  -3.4%
      
Selling, general and administrative expenses 69,150   70,670  -2.2%
Intangible asset amortization 4,191   3,474  20.6%
Other (income) expense, net (2,506)  8,812  -128.4%
Goodwill impairment  --   1,654  -100.0%
Foreign exchange loss (gain) 1,012  (1,494) 167.7%
      
Earnings from continuing operations before the following  30,391   22,679  34.0%
      
Interest expense, net 6,537   7,625  -14.3%
      
Earnings from continuing operations before income taxes 23,854  15,054  58.5%
      
Provision for income taxes 8,566  3,277  161.4%
      
Earnings from continuing operations 15,288  11,777  29.8%
      
Discontinued operations       
Loss from discontinued operations, net of taxes(988) (15,096) 93.5%
Gain on sale of discontinued operations, net of taxes 71  63,676  -99.9%
      
(Loss) earnings from discontinued operations, net of taxes(917) 48,580  -101.9%
      
Earnings14,371  60,357  -76.2%
      
Earnings attributable to non-controlling interests1,523  1,211  25.8%
    
Earnings attributable to SunOpta Inc.12,848  59,146  -78.3%
      
Earnings (loss) per share — basic      
-from continuing operations 0.21  0.16   
-from discontinued operations(0.01) 0.75   
  0.20  0.91   
       
Earnings (loss) per share — diluted       
-from continuing operations 0.21  0.16   
-from discontinued operations(0.01) 0.74   
  0.20  0.90   
     
     
     
SunOpta Inc.    
Consolidated Balance Sheets    
As at October 1, 2011 and January 1, 2011    
Unaudited    
(Expressed in thousands of U.S. dollars, except per share amounts)  
     
 October 1, 2011 January 1, 2011
 $ $
     
Assets     
     
Current assets    
Cash and cash equivalents  7,526  2,335 
Accounts receivable 112,863  98,777 
Inventories  204,760  200,278 
Prepaid expenses and other current assets 24,720  30,023 
Current income taxes recoverable 655   -- 
Deferred income taxes 489  870 
Current assets held for sale  --   424 
 351,013  332,707 
    
Investments  33,845   33,345 
Property, plant and equipment 119,964   115,200 
Goodwill  48,751   48,174 
Intangible assets 56,544   60,200 
Deferred income taxes 12,233   11,889 
Other assets 1,977   2,930 
Non-current assets held for sale  --   4,855 
    
  624,327  609,300 
    
Liabilities    
    
Current liabilities   
Bank indebtedness  107,713  75,910 
Accounts payable and accrued liabilities 103,427  122,743 
Customer and other deposits 2,065  2,858 
Income taxes payable 329  973 
Other current liabilities 2,610  7,674 
Current portion of long-term debt 18,790  22,247 
Current portion of long-term liabilities 672  493 
Currrent liabilities held for sale  --   1,028 
 235,606  233,926 
    
Long-term debt  35,183   42,485 
Long-term liabilities 6,187   6,596 
Deferred income taxes 25,608   20,808 
Non-current liabilities held for sale  --   358 
  302,584  304,173 
    
    
Equity   
SunOpta Inc. shareholders' equity   
Capital Stock  181,751  180,661 
65,742,868 common shares (January 1, 2011 - 65,500,091)   
Additional paid in capital  13,771  12,336 
Retained earnings 108,060  95,212 
Accumulated other comprehensive income 2,377  2,833 
  305,959   291,042 
Non-controlling interest 15,784  14,085 
Total equity 321,743   305,127 
    
 624,327   609,300 
     
     
     
SunOpta Inc.    
Consolidated Statements of Cash Flows    
For the quarter ended October 1, 2011 and October 2, 2010  
Unaudited    
(Expressed in thousands of U.S. dollars, except per share amounts)  
     
 Quarter ended Quarter ended
 October 1, 2011 October 2, 2010
 $ $
     
Cash provided by (used in)    
     
Operating activities   
Earnings 3,510   34,710 
(Loss) earnings from discontinued operations(312)  34,251 
Earnings from continuing operations 3,822   459 
    
Items not affecting cash   
Depreciation and amortization 4,912   4,110 
Unrealized (gain) loss on foreign exchange(991)  829 
Loss on sale of property, plant and equipment 584   -- 
Deferred income taxes 1,102  (2,227)
Stock-based compensation 555   447 
Goodwill impairment  --   1,654 
Impairment of long-lived assets  --   7,505 
Unrealized loss (gain) on derivative instruments 646  (681)
Other 375  (1,450)
Changes in non-cash working capital 648  9,670 
Net cash flows from operations - continuing operations11,653   20,316 
Net cash flows from operations - discontinued operations(914)  (5,100)
  10,739   15,216 
Investing activities   
Acquisition of business, net of cash acquired(2,500)  -- 
Purchases of property, plant and equipment(6,092) (4,707)
Purchases of patents, trademarks and other intangible assets --  (37)
Other411  116 
Cash flows from investing activities - continuing operations(8,181) (4,628)
Cash flows from investing activities - discontinued operations(308)  (12,485)
 (8,489) (17,113)
Financing activities   
Increase (decrease) in line of credit facilities 4,759  (4,329)
Borrowings under long-term debt1,875   -- 
Proceeds from the issuance of common shares 242   338 
Repayment of long-term debt(6,697) (12,188)
Other(19) (44)
Cash flows from financing activities - continuing operations 160  (16,223)
    
Foreign exchange (loss) gain on cash held in a foreign currency(457)  725 
    
Increase (decrease) in cash and cash equivalents during the period 1,953  (17,395)
    
Discontinued operations cash activity included above:   
Add: Balance included at beginning of period 212   17,974 
    
Cash and cash equivalents - beginning of the period 5,361    20,365 
    
Cash and cash equivalents - end of the period 7,526   20,944 
     
     
     
SunOpta Inc.    
Consolidated Statements of Cash Flows    
For the three quarters ended October 1, 2011 and October 2, 2010  
Unaudited    
(Expressed in thousands of U.S. dollars, except per share amounts)  
     
 Three quarters ended Three quarters ended
 October 1, 2011 October 2, 2010
 $ $
     
Cash provided by (used in)    
     
Operating activities   
Earnings 14,371   60,357 
(Loss) earnings from discontinued operations(917)  48,580 
Earnings from continuing operations 15,288   11,777 
    
Items not affecting cash   
Depreciation and amortization 14,608   12,350 
Unrealized gain on foreign exchange(22) (589)
Deferred income taxes 5,527  (179)
Stock-based compensation 1,536   1,867 
Gain on sale of property, plant and equipment(3,240)  -- 
Goodwill impairment  --   1,654 
Impairment of long-lived assets  --   7,895 
Unrealized (gain) loss on derivative instruments(3,272)  328 
Other309  (592)
Changes in non-cash working capital (31,699) (8,648)
Net cash flows from operations - continuing operations(965)  25,863 
Net cash flows from operations - discontinued operations(1,718)  (8,403)
 (2,683)  17,460 
Investing activities   
Acquisition of business, net of cash acquired(2,500)  -- 
Purchases of property, plant and equipment(15,313) (13,283)
Proceeds on sale of property, plant and equipment 2,773   -- 
Payment of deferred purchase consideration --  (721)
Purchases of patents, trademarks and other intangible assets(90) (400)
Other(30)  38 
Cash from investing activities - continuing operations(15,160) (14,366)
Cash from investing activities - discontinued operations(308)   52,298 
 (15,468)  37,932 
Financing activities   
Increase (decrease) in line of credit facilities 33,186  (39,125)
Borrowings under long-term debt1,912   92 
Proceeds from the issuance of common shares 989   850 
Repayment of long-term debt(13,423) (16,327)
Financing costs(186)  -- 
Other 802  (755)
Cash from financing activities - continuing operations 23,280  (55,265)
    
Foreign exchange (loss) gain on cash held in a foreign currency(246)  98 
    
     
Increase in cash and cash equivalents during the period 4,883   225 
    
Discontinued operations cash activity included above:   
Add: Balance included at beginning of period 308   18,967 
    
Cash and cash equivalents - beginning of the period 2,335   1,752 
    
Cash and cash equivalents - end of the period 7,526   20,944 
   
   
   
SunOpta Inc.  
Segmented Information        
For the quarter ended October 1, 2011 and October 2, 2010
Unaudited      
(Expressed in thousands of U.S. dollars)    
           
           
Quarter ended
October 1, 2011
    SunOpta   Corporate  
    Foods Opta Minerals Services Consolidated
    $ $ $ $
Total revenues from          
   external customers   248,318  24,102  --  272,420 
           
Segment Operating Income (Loss) 8,564  1,606 (2,556) 7,614 
           
SunOpta Foods has the following segmented reporting:
           
Quarter ended
October 1, 2011
  Grains and Ingredients Fruit International SunOpta
  Foods Group Group Group Foods Group Foods
  $ $ $ $ $
Total revenues from          
   external customers 121,596  13,690  35,498  77,534  248,318 
           
Segment Operating Income 4,394  1,374  346  2,450  8,564 
           
           
Quarter ended
October 2, 2010
    SunOpta   Corporate  
    Foods Opta Minerals Services Consolidated
    $ $ $ $
Total revenues from          
   external customers    197,066   20,421   --   217,487 
           
Segment Operating Income (Loss)  10,257   2,792  (2,500)  10,549 
           
SunOpta Foods has the following segmented reporting:
           
Quarter ended
October 2, 2010
  Grains and Ingredients Fruit International SunOpta
  Foods Group Group Group Foods Group Foods
  $ $ $ $ $
Total revenues from          
   external customers  86,534   17,134   33,244   60,154   197,066 
           
Segment Operating Income  5,906   3,104   853   394   10,257 
           
(Operating Income (Loss) is defined as "Earnings before the following" excluding the impact of "Other (income) expense, net" and "Goodwill impairment")
   
   
   
SunOpta Inc.  
Segmented Information        
For the three quarters ended October 1, 2011 and October 2, 2010
Unaudited      
(Expressed in thousands of U.S. dollars)    
           
           
Three quarters ended
October 1, 2011
    SunOpta   Corporate  
    Foods Opta Minerals Services Consolidated
    $ $ $ $
Total revenues from          
   external customers   753,067  70,495  --  823,562 
           
Segment Operating Income (Loss) 28,091  6,216 (6,422) 27,885 
           
SunOpta Foods has the following segmented reporting:
           
Three quarters ended
October 1, 2011
  Grains and Ingredients Fruit International SunOpta
  Foods Group Group Group Foods Group Foods
  $ $ $ $ $
Total revenues from          
   external customers 361,971  43,365  114,185  233,546  753,067 
           
Segment Operating Income 15,962  4,168  517  7,444  28,091 
           
           
Three quarters ended
October 2, 2010
    SunOpta   Corporate  
    Foods Opta Minerals Services Consolidated
    $ $ $ $
Total revenues from          
   external customers    608,234   59,493   --   667,727 
           
Segment Operating Income (Loss)  35,552   6,224  (8,631)  33,145 
           
SunOpta Foods has the following segmented reporting:
           
Three quarters ended
October 2, 2010
  Grains and Ingredients Fruit International SunOpta
  Foods Group Group Group Foods Group Foods
  $ $ $ $ $
Total revenues from          
   external customers  257,073   52,932   113,115   185,114   608,234 
           
Segment Operating Income  19,190   10,322   4,121   1,919   35,552 
           
(Operating Income (Loss) is defined as "Earnings before the following" excluding the impact of "Other (income) expense, net" and "Goodwill impairment")

1Non-GAAP Measures

In addition to reporting financial results in accordance with generally accepted accounting principles ("GAAP"), the Company provides information regarding Operating Income and Earnings before interest, taxes, depreciation and amortization ("EBITDA") as additional information about its operating results, which are not measures in accordance with GAAP. The Company believes that these non-GAAP measures assist investors in comparing performance across reporting periods on a consistent basis by excluding items that are not indicative of the Company's core operating performance. The non-GAAP measures of operating income and EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. 

The Company defines Operating Income as "Earnings from continuing operations before the following" excluding the impact of "Other (income) expense, net" and "Goodwill impairment"; and EBITDA as Operating Income plus depreciation and amortization. The following is a tabular presentation of Operating income and EBITDA, including a reconciliation to GAAP earnings, which the Company believes to be the most directly comparable GAAP financial measure:

 Quarter ended Quarter ended
 October 1, 2011 October 2, 2010
 $ $
     
Earnings from continuing operations 3,822   459 
    
Provision for (recovery of) income taxes 1,438  (1,053)
Interest expense, net 2,033   2,036 
Other expense, net 321   7,453 
Goodwill impairment --   1,654 
Operating income 7,614   10,549 
Depreciation and amortization 4,912   4,110 
Earnings before interest, taxes, depreciation and amortization (EBITDA) 12,526   14,659 
     
 Three quarters ended Three quarters ended
 October 1, 2011 October 2, 2010
 $ $
     
Earnings from continuing operations 15,288   11,777 
    
Provision for income taxes 8,566   3,277 
Interest expense, net 6,537   7,625 
Other (income) expense, net(2,506)  8,812 
Goodwill impairment --   1,654 
Operating income 27,885   33,145 
Depreciation and amortization 14,608   12,350 
Earnings before interest, taxes, depreciation and amortization (EBITDA) 42,493   45,495 
CONTACT: Steve Bromley, President & CEO

         Tony Tavares, Vice President & COO

         Robert McKeracher, Vice President & CFO

         Susan Wiekenkamp, Information Officer

         Tel: 905-455-2528, ext 103

         susan.wiekenkamp@sunopta.com

         Website:  www.sunopta.com

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